Nikkei rises to more than 1-month high; automakers, tech shares gain

TOKYO, July 18 (Reuters) – Japan’s Nikkei share average advanced to a more than one-month high on Wednesday as exporters such as automakers and technology firms got a boost after the dollar hit a six-month high against the yen.

The Nikkei gained 0.4 percent to end at 22,794.19, its highest closing point since June 15.

The dollar was up 0.05 percent at 112.955 yen after going as high as 113.08, its strongest since Jan. 9 as U.S. Federal Reserve Chairman Jerome Powell gave an upbeat outlook for the economy and reinforced views that the Fed was on track to steadily hike interest rates.

“In the mid-to-long term, a trade war risk will likely pressure global economic growth but investors are encouraged to take risks now on the back of the strong dollar,” said Shogo Maekawa, global market strategist at JPMorgan Asset Management.

Meanwhile, the Nikkei benchmark index is set for an annual reshuffle in October and e-commerce business operator Start Today Co and Internet business operator CyberAgent Inc are seen as top picks to join, Daiwa Securities estimated. The stocks rose 3.3 percent and 2.3 percent, respectively.

Conversely, Daiwa said that brewer Takara Holdings and stadium and amusement park operator Tokyo Dome Corp are seen as likely candidates for removal, sending the stocks 2.3 percent and 3.9 percent lower, respectively.

Stocks added to the index benefit because managers of index-tracking funds must include them in their portfolios, while shares of companies that are dropped have to be sold.